UK shares opened on the front foot on Thursday in line with other global equity markets after the US Federal Reserve presented a dovish message to investors.
Fed chair Jerome Powell said the central bank would start to taper back its asset purchases as signalled but added it was nowhere near the point of raising interest rates. US markets rallied in response and overnight trading in Asia followed suit.
China’s Shanghai Composite and Japan’s Nikkei 225 both gained around 1%. The pound was steady against the US dollar at $1.36 ahead of the meeting of the BOE (Bank of England) where it will give an update on policy.
At 12.15pm the FTSE 100 index of leading shares was 0.35% higher at 7,273 points.
COMPANY NEWS
Shareholders in challenger financial Metro Bank (MTRO) were celebrating a 40% jump in the stock to 145p after the firm revealed it had received an approach from funds affiliated with the Carlyle Group, although there was no mention of price.
Shares in supermarket chain Sainsbury’s (SBRY) fell 3% to 280p after strong first half results from its grocery business were offset by an unexpectedly weak performance at its Argos subsidiary.
Like-for-like grocery sales grew 0.3% excluding fuel and 6.3% including fuel with year-on-year fuel sales surging 62.7%. However, Argos sales were 7.3% lower for the half after a 12% slide in the last quarter due to sully chain issues and a drop in demand for home office equipment.
The company said it expects consumer behaviour to normalise in the second half and guided for underlying pre-tax profit of at least £660 million.
Shares in telecommunications company BT (BT.) gained 5% to 149p, sending them to the top of the FTSE 100 leader board after the company delivered cast savings ahead of its target date.
However, first half pre-tax profit fell 5% to £1 billion as revenues dropped 3% to £10.3 billion.
The fall in revenue was driven by a decline in its enterprise and global, and flat growth in its consumer business.
An interim dividend of 2.31p per share was declared and the company confirmed its financial outlook for the 2022 and 2023.
By the end of the decade the BT is targeting to generate at least an extra £1.5 billion of normalised free cash flow compared to FY22.
JD Sports Fashion (JD) said the latest CMA (Competition and Markets Authority) announcement regarding its acquisition of Footasylum ‘defied logic’ given that it agrees with the company’s assessment on two important grounds.
The two areas of agreement are that the main competition is now from direct to consumer operations of international firms and not Footasylum and secondly, the merger there will not result in a ‘substantial’ lessening of competition.
However, the CMA now required JD Sports to unwind the acquisition of Footasylum, which closed in May 2019. The shares gained 2.3% to £11.08.
LOWER END OF GUIDANCE
Shares in medical products company Smith & Nephew (SN.) rallied 2.8% to £13.29 despite the company saying it expected to deliver full-year results at the bottom end of the range.
For 2021, the underlying revenue growth guided range was 10%-to-13%, and trading profit margin guided range was 18%-to-19%.
Third quarter revenues grew 5.5% to $1.26 billion driven by growth in its sports medicine & ENT (ear, nose, and throat) business of 8.3% and advanced wound management revenue of 12.1% offsetting a 0.7% decline in its orthopaedics business.
TASTY TREAT
Shares in food and beverage ingredients supplier Tate & Lyle (TATE) surged 4.6% to 679p after reporting strong first half growth with revenues up 19% and pre-tax profit up 20%.
The company said the transaction to create two focused businesses is on track for completion in Q1 of 2022 calendar year.
Tate increased the interim dividend by 2.3% to 9p per share.
Low-cost Hungarian based airline Wizz Air (WIZZ) said first half revenues increased by 86.8% to €880.4 million, as it swung back to a pre-profit of €410.8 million compared with a loss of €71.3 million.
Looking ahead, the company said it anticipated an operating loss in Q3 of around €200 million. The shares edged 0.4% lower to £47.98.
Shares in luxury car making Aston Martin Lagonda Global (AML) revved 2.7% higher to £18.00 after revenues jumped 173% to £736.4 million in the first nine months to 30 September.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) surged to £72.3 million compared with a loss of £117.6 million. The company reiterated its 2021 guidance and said it was making excellent progress on its transformation plan.
